Total Factor Productivity

The Total Factor Productivity (TFP) index is a broad measure of longer-term productivity trends. This index is cumulative with calculation beginning in 1972.

The TFP index is computed as a ratio of total workload to total resource usage. Workload consists of three primary components: mail volume weighted by product type, miscellaneous output (e.g., passports) and delivery points. Weighted mail volume represents the largest share with 64.4 percent of the workload contribution in FY2013. Resource usage includes labor, materials and capital as its three primary inputs. Labor has the largest share with 75.6 percent of the resource usage weight in FY2013. The graph to the right identifies the most recent change over time in the TFP index. A graph depicting the trend since 1972 can be found in the Form 10-K filed by the Postal Service with the Postal Regulatory Commission on November 15, 2013 (see: www.prc.gov/Docs/88/88279/2013_USPS_%20FORM_10K_FINAL.pdf, page 44).

Total Factor Productivity declined in 2008 and 2009 as mail volume declined more rapidly than the Postal Service could adjust. Since that time the projections have been more accurate and timely adjustments have been made.

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